59. According to a presentation by Leon Cooperman, Teledyne engaged in three separate tender offers from 1974 through 1975, repurchasing from between ~10% and ~20% of its outstanding shares in each of them Amazing, considering Teledyne’s troubles at the time.
-
Show this thread
-
60. But just how bad off was Teledyne? Although Argonaut shored up its malpractice reserves, some of the company’s losses in 1974 came from its investment portfolio. There was more to the story than poor underwriting results, the seriousness of which MAY have been embellished.pic.twitter.com/QfUhWkGzSY
1 reply 0 retweets 33 likesShow this thread -
61. For example, when talking to Congress about its NY biz, the CEO of Argonaut admitted that of $69 million of malpractice reserves, Argonaut had only paid out about $24k on its policies. An analysis by an outside firm estimated Argonaut was actually about 2.6x overreserved.pic.twitter.com/wNZBk6O451
1 reply 1 retweet 34 likesShow this thread -
62. Funny thing about increasing your loss reserves as an insurer. Doing so lowers reported earnings, and can make a business look less profitable than it actually is. Maybe it’s a coincidence that so many of Teledyne’s massive tender offers happened around this time.pic.twitter.com/gN0jrVBHhT
1 reply 0 retweets 49 likesShow this thread -
63. Or maybe it wasn’t a coincidence, and Singleton knew what he was doing. At the same time Teledyne was reporting losses from its insurance businesses, its other businesses continued to grow. But it was able to buy in shares at a discount to what it paid a few years earlier.
1 reply 0 retweets 37 likesShow this thread -
64. After insurance results turned in ‘75, the stock soared and became a multibagger from the tender offer prices. With the Argonaut losses, Teledyne had time to do big tenders at low prices. That’s why sequencing and narrative management are important to capital allocation.
2 replies 4 retweets 49 likesShow this thread -
65. A good CEO will try to position the company to perform optimally in the next part of the sequence OR alter the sequence to optimize current reality.
$TSLA would be dead now if Musk failed at this, which is why it’s wrong to chastise him for issuing shares at $243.1 reply 1 retweet 50 likesShow this thread -
66. Because if he didn’t issue shares at $243, the stock would not be at $404 now. It would be at $0, or close to. The future is not independent of the past. It is dependent on it. By altering narrative, we alter the current “reality,” which in turn alters the future.
1 reply 9 retweets 86 likesShow this thread -
67. Singleton altering perceptions of Teledyne’s profitability to buy back shares on the cheap and Musk performing elaborate
games to issue equity at high prices are two sides of the same coin.
Both are legendary to me for seeing narrative & sequence as capital to allocate.3 replies 2 retweets 56 likesShow this thread -
Replying to @LAForeverHall
Great tweets. But I don’t understand this one. Teledyne obfuscated results to buyback shares cheap. How did musk take advantage of the created negative perception? He didn’t buyback shares.
1 reply 0 retweets 1 like
His is inverted. It’s not negative perception he’s creating to take advantage of. Just the opposite.
-
-
Replying to @LAForeverHall
but how is it a positive perception when you issue shares at $243 - you’re essentially saying your stock is overvalued?
0 replies 0 retweets 0 likesThanks. Twitter will use this to make your timeline better. UndoUndo
-
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.